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Bill dies that sought tax equity between car rental and car sharing firms

(Scott Sommerdorf | Tribune file photo) Travelers walk past the taxi stand at the Salt Lake International Airport, Wednesday, July 20, 2016.

  | March 11, 2019, 5:08 p.m.
| Updated: March 12, 2019, 12:43 a.m.

A Senate committee on Monday killed a bill that sought to create more tax equity between traditional car rental companies and new peer-to-peer car sharing firms.

Rep. Kim Coleman, R-West Jordan, the bill’s sponsor, said she had worked out a compromise that most sides could support, but it came so late that she had been unable to put it into a written substitute bill.

The committee was unwilling to forward the bill to the Senate floor without first seeing the changes in writing, and voted 5-1 essentially to kill it for the session.

Meanwhile, Sen. Curt Bramble, R-Provo, announced to the Senate that a similar bill has been pushing is also dead for this year’s session. He said he believes that inaction will make car sharing companies such as Turo subject to all taxes and airport fees that car rental companies face.

Lawmakers say they expect more discussion on the topic during interim meetings after the Legislature adjourns.

Car-sharing companies such as Turo have escaped most taxes and airport fees by claiming they are not car rental companies, and that they just connect those who want to rent their cars with customers.

Traditional car rental companies complained that allows the upstart firm to lower its prices unfairly by up to 30 percent. But Turo in turn complained that rental car companies pay no sales tax on their fleets, and that gives them big financial advantages over the private car owners that use its service.

Last week, the Salt Lake City Council passed an ordinance that will allow handing out hefty $500 tickets to people who use Turo and similar companies to rent their personal cars at the airport, unless the company starts paying airport fees within 90 days. The city is still negotiating what those fees should be.

State legislators have also been discussing how much car-sharing firms should pay in sales and tourism taxes. Coleman said she had worked out a compromise to allow car share companies to pay state and local sales taxes in the range of 7 percent, a 1.5 percent tourism tax and a 2.5 percent tax on peer-to-peer firms.

The Utah Car Rental Association complained it had not been a party to negotiations, although Enterprise Car Rental was among those who participated.